Duffy v. Gerst
| Decision Date | 01 May 1981 |
| Citation | 286 Pa.Super. 523,429 A.2d 645 |
| Parties | William R. DUFFY v. Kenneth C. GERST, Ralph D. Tamburro, Freeman, Foltz & Valicenti Realty, Inc., Eugene Gottesman and Anthony D. Valicenti. Appeal of Kenneth C. GERST and Ralph D. Tamburro. |
| Court | Pennsylvania Superior Court |
Alfred C. Maiello, Pittsburgh, for appellants.
Reuben Fingold, Pittsburgh, for appellee.
Before SPAETH, WICKERSHAM and LIPEZ, JJ.
This is an appeal from an order denying a petition to strike or open a default judgment. So far as the order denies the petition to strike, we shall affirm, for we find no such defect on the face of the record as warrants striking the judgment. So far as the order denies the petition to open, however, we shall reverse and remand for further proceedings as provided by Pa.R.C.P. 209, for we have concluded that the lower court should not have ruled on the basis of the petition and answer alone.
On June 2, 1978, appellants, Kenneth C. Gerst and Ralph D. Tamburro, entered into an agreement with appellee, William R. Duffy, for the sale of a parcel of real estate in Millvale. The agreement provided that appellants would convey the property free and clear of all encumbrances for a consideration of $105,000, appellee to pay $5,000 earnest money upon the signing of the agreement. The agreement also provided for the parties' remedies. If appellee as buyer defaulted, appellants as seller could elect to (a) retain the earnest money, or (b) apply the earnest money towards the purchase price and proceed with an action for specific performance, or (c) apply the earnest money towards seller's loss on resale and proceed with an action at law for damages. If appellants as seller defaulted, appellee as buyer could elect (a) to waive any claim for loss of bargain, in which event appellants as seller would repay the earnest money and, in addition, the cost of title examination, survey, and attorney's fees, or (b) an action for specific performance, or (c) an action at law for damages.
Appellee paid the $5,000 earnest money, and it was held in escrow by Freeman, Foltz & Valicenti Realty, Inc., and real estate agents Eugene Gottesman and Anthony D. Valicenti. When title examination disclosed two mortgages on the property and several judgment liens, appellee, on September 6, 1978, filed a complaint in equity against appellants, Freeman, Foltz & Valicenti Realty, Inc., Gottesman, and Valicenti, alleging:
18. Due to the state of the record, defendants Gerst and Tamburro (appellants) are unable to convey subject property to plaintiff (appellee) with a fee simple title free and clear of encumberances. (sic).
19. Plaintiff has requested defendants Gerst, Tamburro, Realty (Freeman, Foltz & Valicenti, Inc.) Gottesman and Valicenti to rescind the agreement ... and return the hand money to him, but defendants have failed and refused to comply.
20. Defendants have threatened plaintiff that they will convey subject property to a third party at a substantially lessor (sic) amount than the consideration provided for in the agreement ... and bring an action at law against plaintiff for the difference in the amount between the consideration in the agreement ... and the amount they sell the property to another party.
The relief prayed for was a decree restraining appellants from conveying the property pending final determination of the action, declaring the agreement of sale between appellants and appellee null and void, directing Freeman, Foltz & Valicenti Realty, Inc., Gottesman, and Valicenti to return the $5,000 earnest money plus interest, and "(s)uch other relief as the Court may deem necessary and proper."
In response to the complaint, Freeman, Foltz & Valicenti Realty, Inc., Gottesman, and Valicenti, returned the $5,000 earnest money to appellee, though not with interest. Thereupon, on October 19, 1978, appellee moved to dismiss the action as to them. This motion was granted. Also on October 19, 1978, the prothonotary, on appellee's praecipe, entered a default judgment against appellants. On November 3, 1978, the lower court, FLAHERTY, J., ordered that a hearing should be held on November 21, 1978, for the framing and entry of a final decree. The hearing was held, as scheduled, before NARICK, J. Appellants failed to appear. Judge NARICK entered a final decree declaring the agreement of sale null and void, and entering judgments against the appellants for the following amounts:
Interest on $5,000 at 6% from
August 8, 1978 to October 18
1978 $ 57.53
Reimbursement for cost of title
search 250.00
Counsel fees 3,500.00
--------
Total 3,807.53
And costs
On March 22, 1979, appellants filed their petition to strike or open the judgment. At this point, the history of the case becomes a bit complex. Appellee filed an answer to the petition to strike or open, and the petition and answer came before Judge FLAHERTY. After argument on the petition and answer, Judge FLAHERTY, on May 23, 1979, issued a rule to show cause why the judgment should not be opened. It does not appear that the judge ruled on the petition so far as it asked that the judgment be stricken. Apparently, counsel for neither side received notice of the rule to show cause why the judgment should not be opened. Shortly after issuing the rule, Judge FLAHERTY ascended to the Supreme Court of Pennsylvania. Accordingly, the case was reassigned to Judge NARICK, who by order of June 19, 1979, announced that he would dispose of "(the case) (u)pon consideration of said Petition and Answer ... unless either or both counsel request the opportunity to argue their respective positions on or before July 17, 1979." When Judge NARICK heard argument on the petition and answer, on July 17, he discovered that counsel had no knowledge of the rule that had been issued by Judge FLAHERTY on May 23. Judge NARICK thereupon advised counsel that notwithstanding the rule, he would dispose of the case on petition and answer alone, and on August 2, 1979, he issued an order revoking the rule and dismissing the petition to strike or open the judgment. It is appellant's appeal from this order that brings the case before us.
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In their petition, appellants assign only one reason why the judgment should be stricken, namely, appellee's "failure to comply with Rule 236." Petition, para. 30. In their brief to us, appellants assign as an additional reason that the judgment "is excessive and improper on the face of the record." Appellants' brief at 5.
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Pa.R.C.P. 236 provides in part:
(a) The prothonotary shall immediately give notice by ordinary mail of the entry of any order, decree or judgment:
(2) ... to each party who has appeared in the action or to the party's attorney of record.
Allegheny County Rule 236 * 1 provides in part:
(a) In cases where a party has not appeared, the prothonotary shall give written notice of the entry of judgment or decree by ordinary mail addressed to the last known address of each party who has not appeared.
The record indicates that in compliance with these rules, on October 20, 1978, appellants received notice of the entry of the default judgment and of the lower court's order scheduling a hearing on November 21, 1978, for the framing and entry of a final decree. Appellants allege in their petition to strike or open that they expected the final decree to direct payment of $427.05, comprising interest on the earnest money, $58.03; cost of the title report, $250; and costs of the suit, $118.75. Petition, para. 18. As noted above, in fact the final decree directed payment of $3,807.53, of which amount $3,500 was identified as "(c)ounsel fees." Appellants allege in their petition to strike or open that they never received notice from the prothonotary of this final decree, as they should have under Pa.R.C.P. 236 and Allegheny County Rule 236 Petition, paras. 19-21. Appellee's answer to the petition is non-responsive, so that we may take it as fact that appellants did not receive notice of the final decree.
The issue therefore becomes whether a failure of the prothonotary, disclosed by the record, to comply with Pa.R.C.P. 236 and Allegheny County Local Rule 236 is a ground for striking a judgment. We hold that it is not. Appellants claim that because they did not receive notice of the final decree, their "appeal rights in regard to the Final Decree and Award were prejudiced." Appellants' Brief at 18. This is not so, for their remedy was not to appeal from the decree, but rather, as the decree was entered pursuant to a default judgment, to petition to strike or open the judgment, which appellants did. In our opinion, the remedy for a failure by the prothonotary to give the notice required by Rule 236 and its local counterpart 236 is not to strike the judgment but to ensure that the party who was entitled to the notice is not prejudiced. How this may be achieved will vary according to the particular facts of the case. As an illustration, however, it may be noted that if the plaintiff argues that the defendant did not file a petition to open promptly, the argument may well be rejected upon proof that the defendant did not receive the notice to which he was entitled, but did act promptly once he learned, despite the lack of notice, that the judgment had been entered. This view of what should be the remedy for a failure by the prothonotary to give the notice required by Rule 236 and its local counterpart 236 is confirmed by subsection (c) of Rule 236, which provides:
(c) Failure to give the notice or to mail the required documents, or both, shall not affect the lien of the judgment.
Since lack of notice is not a ground for removing the lien of the judgment, it cannot be a ground for striking the judgment upon which the lien is based.
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The agreement of sale provided that in the event...
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